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SGX Securities Lending

The 8 th ACG Cross Training Seminar. SGX Securities Lending. 27 – 28 June 2006. Singapore Exchange. Overview. SBL process and model What we do Tax guidelines & Regulatory updates Q&A. Direct Account Holder. Borrowing Request. DA Sub- Account Holder. Check Stock Availability.

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SGX Securities Lending

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  1. The 8th ACG Cross Training Seminar SGX Securities Lending 27 – 28 June 2006 Singapore Exchange

  2. Overview • SBL process and model • What we do • Tax guidelines & Regulatory updates • Q&A

  3. Direct Account Holder Borrowing Request DA Sub- Account Holder Check Stock Availability Confirm Stock Availability Confirm Stock Availability Direct Account Holder Collateral Deposit Receive Loan Stock Deliver Loan Stock DA Sub- Account Holder Direct Account Holder AUTOMATED PROCESS CDP Clearing Member / Depository Agent (Borrower) Lending Pool

  4. Collateral Fees Fees Loaned Stock Loaned Stock SIMPLY…….. Borrowers CDP Lenders

  5. CDP SBL MODEL • Lenders : CDP account holders • Borrowers : Depository Agents/Clearing Members • Facility : Borrowing period are -T + 3 borrowing period - Open dated Lending (subject to recall) : Borrowing fee is non-negotiable : First come first serve basis : Same day borrowing (cut-off time 11.00am) : Can return partial or full anytime : Minimum size is 1,000 shares

  6. SBL RISK MANAGEMENT • Borrowing limit – per borrower and in total • Lending pool limit 25% • Concentration limits (eg. each borrower to borrow no more than 5% of the listed company issued capital) • Loans and collateral are marked-to-market at least once daily Cash and LC collateral – at least 105% of loan value  Securities collateral – at least 130% of loan value

  7. TAX GUIDELINES • Transfer of securities and collateral will not be regarded as a disposal. • Lending fee and rebate fee arising from SBL is tax exempted. • Manufactured dividend is taxable. • For non-residents, lending fee received is grossed, no withholding tax.

  8. Questions ?

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